Written:
1930?First Published: 2004;Source: Henryk Grossman,
manuscript starting ‘Die Entwertung sollen die Zusammenbruchstendenz
aufheben …’ in original Folder 45 ‘Stellungnahme zur Kritik am
Hauptwerk’, Archive of the Polish Academy of Sciences, Warsaw. From Rick Kuhn 'Economic
crisis and socialist revolution: Henryk Grossman’s Law of accumulation,
its first critics and his responses’, which is an early draft of a paper in
Paul Zarembka and Susanne Soederberg (eds) Neoliberalism in
crisis, accumulation and Rosa Luxemburg's Legacy: Research
in Political Economy 21 Elsevier, Amsterdam 2004 pp. 181-22;Translated: Rick Kuhn;Transcription/Markup:
Steve Palmer;Proofread: Steve Palmer;Copyleft:
InternetArchive(marxists.org) 2005. Permission is
granted to copy and/or distribute this document under the terms of
the Creative
Commons License; Reproduced here with the permission of the translator, Rick Kuhn.

[the] proposition that devaluation of capital
neutralizes the tendency to
break down, necessarily entails the proposition that there is no
development of an ever higher organic composition of capital in
contemporary capitalist
society!

The Marxist concept of a progressively higher
organic composition of
capital entails 2 different conclusions. First, the development of the
productivity of
labor means that the same mass of living labor (L) can set in motion an
ever
larger mass of means of production, that, as a consequence, the
progress of the
human economy is expressed in a progressively higher technical
composition
[of capital], in the relative increase of MP [means of production] in
relation
to L.

Second,
with this technical progress, which is just another expression for the
increase
in the productivity of labor, the products of human labor (means of
production
and consumption) are devalued, that is cheapened.
So we have two counterposed
movements. On the one hand an ever greater mass of
MP, on the other hand
a cheapening of this mass of products.

Considered
abstractly, one can imagine that the devaluation is greater
than the
increase in the mass of means of production. In
that case, despite the
ever larger mass of MP per worker, there would be a progressively declining
value of this larger mass. Then it would be possible to speak
not of a
progressively higher organic composition, but merely a higher technical
and a
declining value composition [of capital]. A higher organic composition
of
capital implies that the means of production grow in both their mass and
their value compared with living labor. Both will move in the
same
direction (even if not at the same rate).

The
question arises, how do things develop in reality? Is the pace
of these
two counterposed movements, growth in mass and decline in value, equal
so that
they paralyse each other? Or does the movement of
one or the other
predominate?

…

Now the
question of which of the two tendencies, growth in the mass or
devaluation is
stronger, that is, the question of whether devaluation occurs to the
same
extent as the growth in the mass of the MP and thus the growth in mass
is
paralysed by the decline in value, or rather whether devaluation is not
as
great and consequently that despite the devaluation of the MP, its
value in
relation to v grows, cannot be abstractly, deductively
decided and has to
be decided through empirical observation. Experience,
indeed the
experience of more than one hundred years, teaches that the value
of
constant capital, thus also of the total capital, in relation to
variable
capital grows more quickly than variable, that is,
in the relationship
c:v, c [constant capital] grows faster than v
[variable capital].

…

If,
then, Helene Bauer wants to contradict the tendency to collapse and
show that,
through the devaluation of capital the mass of surplus value in
relation to
this total capital is not exhausted, does not
decline, she has to
demonstrate the incorrectness of the empirical fact
of the progressively
higher organic composition of capital or, to speak with Otto Bauer, she
has to
demonstrate that the law of the ‘decline
of V/P is incorrect’.

It is an
impermissible contradiction--thoughtlessness[--]to talk about the fact
of the
progressively higher organic composition of capital and at the same
time to
assert that devaluations neutralize the tendency to
break down, i.e. to
deny the fact of the higher organic composition of capital…

But if
the tendency to a higher organic composition of capital, that is to a
relative
decline in living labor, exists then the tendency to break down results
from
the progress of capital accumulation and at a certain level a continuously
larger part of the newly created value product will be
accumulated as additional capital.

[The portion of surplus value that has to be
invested to sustain the accumulation process]

grows
relative to the total mass of living labor and, with a correspondingly
large
growth of constant capital, entirely swallows the mass of
value created
by living labor, surplus value and the wage fund.

…

In
addition, when one does not start with the individual
commodity but
considers the total mass of commodities,
devaluation has indifferent
consequences. The 100,000 workers in the scheme indeed produce a
tremendously
greater mass of use values with the same amount of labor, as the total
outlay
on labor has not changed. The total mass of value is unchanged
even if
the individual commodity is cheaper. There are now more
things
that the value (v+s) represents, but the amount of new value v+s
produced by
the same number of workers has not changed. And the same is the case
with the c
part in Department II [producing means of consumption]. It incorporates
more
commodities, useful things. Each individual
commodity is cheaper, but
the size of the total mass of commodities has, nevertheless, the same
value
which is consumed and carried over to the annual product.

If the
objection that devaluation is not considered has any meaning at all,
then it is
only that one’s starting point is useful things.
Let us assume that the
entire rural economy uses 1,000 electric ploughs (each with a value of
£80=£80,000) which are sufficient to work the
available land. If productivity
now doubles, so that with the same labor 2,000 electric ploughs can be
produced, then the rural economy will not be able to buy them, as they
are
superfluous. Devaluation must have the consequence that the rural
economy now
only buys 1,000 ploughs, each with a value of
£40=£4,000. Consideration of
devaluation shows the unsaleability of the product, the disruption of
all the
proportions worked out so arduously by Otto Bauer.